-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NJ76/cBYZYml5vR3NhKLtlGjmLcL1fSjoHs/7Fk4JRKShhAAvusyiLQ6QzlKOckd 4K0O7/YmPxAX4F73YhJqlw== /in/edgar/work/20000814/0001013993-00-000083/0001013993-00-000083.txt : 20000921 0001013993-00-000083.hdr.sgml : 20000921 ACCESSION NUMBER: 0001013993-00-000083 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: YAAK RIVER RESOURCES INC CENTRAL INDEX KEY: 0000849146 STANDARD INDUSTRIAL CLASSIFICATION: [6770 ] IRS NUMBER: 841097796 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-30489 FILM NUMBER: 700669 BUSINESS ADDRESS: STREET 1: 830 SOUTH KLINE WAY STREET 2: #280 CITY: LAKEWOOD STATE: CO ZIP: 80226-7506 BUSINESS PHONE: 3039853972 MAIL ADDRESS: STREET 1: 830 S KLINE WAY CITY: LAKEWOOD STATE: CO ZIP: 80226 FORMER COMPANY: FORMER CONFORMED NAME: ANDRAPLEX CORP DATE OF NAME CHANGE: 19920406 10QSB 1 0001.txt U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission file number: 0-30489 YAAK RIVER RESOURCES, INC. ----------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Colorado 84-1097796 ------------------------------- --------------------------------- (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 2501 East Third Street, Casper, Wyoming 82609 ----------------------------------------------- (Address of principal executive offices) (307) 235-0012 -------------------------------- (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No ___ As of July 31, 2000, 62,808,857 shares of common stock, par value $0.0001 per share, were outstanding. Transitional Small Business Disclosure Format: Yes___ No _X_ This Form 10-QSB consists of 16 pages. Exhibits are indexed at page 6. 1 PART I -- FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Please see pages F-1 through F-6. ITEM 2. MANAGEMENT'S DISCUSSSION AND ANALYSIS OR PLAN OF OPERATION. Plan of Operations The Company's plan of operations has two aspects. Management intends to pursue both of those aspects on a concurrent basis until such time as it appears that the Company has a strong prospect of carrying one of the aspects to a successful conclusion. First, management intends to seek out and pursue a business combination with one or more existing private business enterprises that may wish to take advantage of the Company's status as a public corporation. At this time, management does not intend to target any particular industry but, rather, intends to judge any opportunity on its individual merits. Second, management intends to seek opportunities to develop the Company's unimproved real estate holdings in Teller County, Colorado. See "Company Properties," below. Both the risks and the potential rewards of this real-estate-development possibility are substantial. See "Summary Description of Possible Plan of Operations for the Company's Properties," below. Management is unable at this time to predict which of the two aspects of its current business plan will prove to be the more attractive one as events unfold. A full assessment of the needs and the potentials of the real-estate-development possibility, in particular, has not yet been made. Management intends to begin to make such an assessment in the near future. Company Properties In 1999, a real-estate development business opportunity in Teller County, Colorado, was brought to management's attention. The nucleus of the opportunity consisted of the availability of 91 unimproved lots zoned for residential development. The lots comprise a total of approximately 4.7 acres of land. They are located in the scenic Pike's Peak region approximately six miles by road from the historic mining town of Cripple Creek, Colorado, and approximately 40 miles by highway from the Colorado Springs metropolitan area. The Company acquired the lots on September 25, 1999, from Donald J. Smith of Casper, Wyoming. Mr. Smith was elected to be a Director of the Company at the Company's 1999 Annual Meeting of Shareholders held on December 18, and was then appointed by the Board of Directors to serve as President of the Company. In connection with the purchase, the Company's board of directors deemed the lots to have a total fair market value of $162,000. The purchase price was paid in the form of approximately 23,000,000 treasury shares of the Company's common stock. See Note 2 of Notes to Financial Statements. 2 As stated above, the Company's board of director's determined that the lots had a fair market value, at the time of their acquisition by the Company, of $162,000. The lots were acquired, however, from a person who, as a result of the acquisition, became an affiliate of the Company. In such a transaction, generally accepted accounting principles require that the lots be carried on the Company's balance sheet not at their market value or at their cost to the Company but, rather, at their historical cost to the affiliate. The affiliate/seller, Donald J. Smith, paid a total of $35,743 for the lots in 1992. Accordingly, the asset value of the lots is carried on the Company's balance sheet at that lower, historical figure. See Note 2 of Notes to Financial Statements. Summary Description of Possible Plan of Operations for the Company's Properties A. Economic Concept. The economic theory that underlies the real-estate-development aspect of the Company's business plan has three bases. The primary basis of the plan is found in the local economy of Cripple Creek, Colorado. In 1991, limited-stakes gaming became legal in three historical mining communities in Colorado. Cripple Creek is one of the three. Subsequent to the legalization of limited-stakes gaming, Cripple Creek has developed an active casino business. This activity has created a demand for residential housing, particularly among casino workers but also among service workers in businesses, such as the food and beverage businesses, that are supported by the casino trade. Management believes that the supply of existing housing to meet this demand is very limited. Two additional economic bases for the real-estate-development aspect of the Company's business plan are of lesser significance, but deserve nevertheless to be identified. The first of these lies in the ongoing geographical expansion of the Colorado Springs residential base. The second additional basis lies in the local, regional, national, and worldwide demand for second homes and vacation homes in areas having attractive natural or historical settings. Management believes that the sources of this demand include (i) the strength of the U.S. economy, (ii) new concentrations of wealth created by the success of the U.S. stock markets in general, and by the phenomenon of tech-company stock options and the like, (iii) substantial inter-generational wealth transfers to the so-called baby-boomer generation, (iv) relatively low interest rates, and (v) availability of the mortgage-interest deduction. Management believes that the historical and natural attractions of the Pike's Peak region, together with reasonable proximity to the business and transportation hub of Colorado Springs, form a base from which this demand can be exploited. B. Alternative Approaches to Development of the New Properties Management is in the early stages of evaluating the tack it intends to take to exploit the Company's properties. Critical issues as to financing, staffing, identification of development partners or builders, and the like, have not advanced beyond the discussion stage. As a result, management's intentions with respect to the properties can be described only in outline form. It is more likely than not that those intentions will undergo considerable change in the near term. 3 Subject to those limitations, management currently believes that possible business strategies include the following: 1. The Company could contract with, or enter into a joint venture with, a development firm to develop the entire package of lots. 2. The Company could market the lots directly to consumers through local, regional, or national promotions. 3. The Company could "gin up" to be its own prime contractor. 4. Instead of trying to develop the properties as a whole, the Company could act as a custom builder or a spec. builder for individual lots, one by one. Development might consist of stand-alone residences, multi-unit housing, or mobile-home parks. C. Financial Requirements of the Alternatives Listed in B, above The Company's properties are in an unimproved state. The greatest initial cost associated with any of the options listed above, therefore, would be that of installing streets and utilities. Management estimates that the cost of such basic improvements would be in the range of $4 million to $5 million. The Company's properties lie many miles by mountain highway from the nearest sources of building materials and equipment. As a result, the cost of transportation would be a significant component of the overall cost of basic improvements. Management believes that this cost is among the factors that have inhibited other developers from attempting to satisfy the sizeable, unmet demand for housing that became obvious in Cripple Creek beginning in 1991. Aside from capital required to meet the costs of basic improvements, substantial capital would be required to implement most of the alternatives listed in B, above. The Company does not currently have sources for such capital, and there is no certainty that such sources will become available in the future. Management has held preliminary discussions with possible conventional and venture-capital lenders. In those discussions, the lenders have expressed a preference to offer financing only with respect to the most desirable of the lots contained in the new properties, and have insisted that the Company subordinate its interest in the properties in favor of project financing. In such circumstances, a failure of the project would result in foreclosure on the project financing, and a consequent loss by the Company of its interest in the properties. Management does not believe a risk of this magnitude to be appropriate for a public corporation and, therefore, determined not to consider such subordination. The Company's unwillingness to subordinate its interest in the properties to providers of project financing will limit the Company's ability to obtain capital to develop the properties. 4 D. Other Special Business Risks Associated with the Company's Plan of Operations In addition to the financial risks described in C, above, the real-estate-development aspect of the Company's business plan outlined in this section entails a high degree of business risk. Among the risk factors are: 1. Interest rate increases, which are likely to have a negative impact upon: a. the availability of purchase financing to potential buyers of improved or unimproved properties of the Company; and b. the availability of project financing to the Company or its contractors. 2. Changes in tax laws that might result, for example, in a loss or diminution of the mortgage-interest deduction. 3. A downturn in the local or general U.S. economies, thus depressing demand for developed or unimproved properties. 4. Competition from other development projects, both local and regional. Special Note Regarding Forward-Looking Statements Some of the statements in this Item 2 "Management's Discussion and Analysis or Plan of Operation," and elsewhere in this Report and in the Company's other periodic filings with the Securities and Exchange Commission constitute forward-looking statements. These statements involve known and unknown risks, significant uncertainties, and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by such forward-looking statements. Such factors include, among other things, those listed under "Other Special Business Risks Associated with the Company's Plan of Operations" and elsewhere in this Report. In some cases, one can identify forward-looking statements by terminology such as "may," "will," "should," "could," "intends," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of such terms or other similar terminology. The forward-looking statements herein are based on current expectations that involve a number of risks and uncertainties. Such forward-looking statements are based on assumptions that the Company will obtain or have access to adequate financing for each successive phase of its growth, that there will be no material adverse competitive or technological change in condition of the Company's business, that the Company's President and other significant employees will remain employed as such by the Company, and that there will be no material adverse change in the Company's operations or business, or in governmental regulation affecting the Company. The foregoing assumptions are based on judgments with respect to, among other things, future economic, competitive, and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the Company's control. Although management believes that the expectations reflected in the forward-looking statements are reasonable, management cannot guarantee future results, levels of activity, performance, or achievements. Moreover, neither management nor any other person assumes responsibility for the accuracy and completeness of such statements. 5 PART II -- OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K Exhibits Exhibit No. Description Location ----------- ----------- --------- 27 Financial Data Schedule 6 SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: August 14, 2000 YAAK RIVER RESOURCES, INC. By: /s/ Donald J. Smith -------------------------- Donald J. Smith, President (Principal Executive Officer) By: /s/ James K. Sandison ----------------------------- James K. Sandison, Secretary and Treasurer (Principal Financial Officer and Principal Accounting Officer) 7 SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: August 14, 2000 YAAK RIVER RESOURCES, INC. By: /s/ Donald J. Smith -------------------------- Donald J. Smith, President (Principal Executive Officer) By: /s/ James K. Sandison ----------------------------- James K. Sandison, Secretary and Treasurer (Principal Financial Officer and Principal Accounting Officer) 8 YAAK RIVER RESOURCES, INC. (A Development Stage Company) FINANCIAL STATEMENTS June 30, 2000 (Unaudited) REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT To the Board of Directors Yaak River Resources, Inc. Casper, Wyoming We have reviewed the accompanying balance sheet of Yaak River Resources, Inc. as of June 30, 2000 and the related statements of operations for the three month and six month periods ended June 30, 2000 and 1999, and the cash flows for the six months ended June 30, 2000 included in the accompanying Securities and Exchange Commission Form 10-Q for the period ended June 30, 2000. These financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the balance sheet as of December 31, 1999, and the related statements of operations, stockholders' equity and cash flows for the year then ended (not presented herein). In our report dated March 6, 2000, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying balance sheet as of June 30, 2000 is fairly stated in all material respects in relation to the balance sheet from which it has been derived. Michael Johnson & Co., LLC. Denver, Colorado August 2, 2000 F-1 YAAK RIVER RESOURCES, INC. (A Development Stage Company) Balance Sheet (Unaudited) June 30, December 31, 2000 1999 ------------ ------------ ASSETS CURRENT ASSETS: Cash $ 14,574 $ - Investment - Properties 35,743 35,743 --------- --------- Total current assets 50,317 35,743 --------- --------- OTHER ASSETS Organizational Costs - Net of Amortization - - --------- --------- Total Other Assets - - --------- --------- TOTAL ASSETS $ 50,317 35,743 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts Payable $ 25 $ 2,000 Advance from (YRML) Purchase, 1.5 Units - - Shareholder Loans 22,000 22,000 -------- -------- Total current liabilities 22,025 24,000 -------- -------- STOCKHOLDERS' EQUITY Series A Common Stock, par value $.0001 per share; 250,000,000 Shares, Issued and outstanding - 59,666,000 and 56,666,000 respectively 5,966 5,666 Series B Common Stock, par value $.0001 per share; Authorized 250,000,000 Shares, Issued and outstanding, None - - Capital paid in excess of par value 325,363 304,663 Deficit accumulated during the development stage (303,037) (298,586) ---------- -------- TOTAL STOCKHOLDERS' EQUITY 28,292 11,743 --------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 50,317 $ 35,743 ========= ========
See accompanying independent accountant's review report and notes to financial statements. F-2 Yaak River Resources, Inc. (A Development Stage Company) STATEMENTS OF OPERATIONS (Unaudited) For the Six For the June 10, 1988 Month Period Year Ended (Inception) Ended June December 31, thru June 30, 2000 1999 30, 2000 ------------ ------------ ------------ REVENUE $ - $ - $ - EXPENSES Amortization - - 1,500 Bank Charge - 56 545 Legal & Accounting 3,324 5,562 62,228 Director Fees - - 800 Office Expense - 382 7,843 Stock Fees & Other Costs - 65 10,072 Administration/Consulting 1,117 9,139 126,107 Mining Assessments & Fees - - 75,479 Bad Debt - - 6,250 Rent/Telephone - - 12,213 -------- -------- --------- Total Expenses 4,441 15,204 303,037 -------- -------- --------- NET LOSS ACCUMULATED DURING THE DEVELOPMENT STAGE $ (4,441) $ (15,204) $ (303,037) ======== ======== ========= * - NET LOSS PER COMMON SHARE IS LESS THAN $.0002 $ * $ * ======== ======== Weighted average number of common shares outstanding 58,166,000 56,666,000 ========== ==========
See accompanying independent accountant's review report and notes to financial statements. F-3 Yaak River Resources, Inc. (A Development Stage Company) STATEMENTS OF CASH FLOWS (Unaudited) For the Six For the June 10, 1988 Month Period Year Ended (Inception) thru Ended June December 31, June 30, 30, 2000 1999 2000 ------------ ---------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss Accumulated During The Development Stage $ (4,451) $ (15,204) $ (303,037) Adjustments to reconcile net loss to net cash used in operating activities: Amortization and Depreciation - - 1,500 Organization Costs - - (1,500) (Decrease) Increase in Accounts Payable (1,975) (104,772) 25 Decrease(Increase) in Accounts Receivable - - - (Decrease) Increase in Loans to Shareholder - (7,406) 22,000 ------- -------- ------- Net cash flows used in operating activities (6,426) (127,382) (281,012) ------- -------- ------- CASH FLOWS FROM INVESTING ACTIVITIES Exchange of properties - net - 147,167 147,167 Investment Purchase - - (305,410) ------- ------- --------- Net cash used in investing activities - 147,167 (158,243) ------- ------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common stock 21,000 - 22,800 Loan from LP Investors - (20,000) - Proceeds from Long-Term Debt - - 167,500 Payment of Long-Term Debt - - (45,000) Proceeds from Sale of Stock - - 308,529 --------- -------- --------- Net cash flows provided by financing activities 21,000 (20,000) 453,829 --------- -------- --------- Net Increase (Decrease) in cash 14,574 (215) 14,574 Cash at beginning of period - 215 - ----------- --------- ----------- Cash at end of period $ 14,574 $ - $ 14,574 =========== ============ ============= Supplemental Disclosure of Cash Flow Information: Cash paid during the period For interest $ - $ - $ - ========== ========== =========== Cash paid during the period For income taxes $ - $ - $ - ========== ========== ===========
Noncash Investing and financing activities: In 1999, the Company exchanged properties with a book value of $182,910 to a related party in payment of liabilities of $147,167 and land with book value of $35,743 See accompanying independent accountant's review report and notes to financial statements. F-4 Yaak River Resources, Inc. (A Development Stage Company) Statement of Stockholders' Equity (Unaudited) Deficit Capital Paid Accum. During Common In Excess of the Development # of Shares Stock Par Value Stage Totals ----------- ------ ------------ --------------- ------ June 10, 1988 (Inception) - $ - $ - $ - $ - Issuance of common Stock: January 6, 1989 (for services) 10,000,000 1,000 500 - 1,500 January 6, 1989) (for cash) 5,000,000 500 - - 500 November 27, 1989 (Public offering) 2,266,000 266 12,353 - 12,619 Net Loss - - - (3,765) (3,765) ---------- ----- ------- -------- ------ Balance- December 31, 1989 17,666,000 1,766 12,853 (3,765) 10,854 Net Loss - - - (10,129)(10,129) ---------- ----- ------- -------- ------ Balance- December 31, 1990 17,666,000 1,766 12,853 (13,894) 725 Net Loss - - - (300) (300) ---------- ----- ------- -------- ------ Balance- December 31, 1991 17,666,000 1,766 12,853 (14,194) 425 Issuance of common Stock: January 10, 1992 (for assets YRML) 30,000,000 3,000 134,910 - 137,910 Net Loss - - - (47,589)(47,589) ---------- ----- ------- -------- ------ Balance- December 31, 1992 47,666,000 4,766 147,763 (61,783) 90,746 Issuance of common Stock: June 30, 1993 (for cash) 6,000,000 600 149,400 - 150,000 June 30, 1993 (for services) 3,000,000 300 - - 300 Net Loss - - - (54,951)(54,951) ---------- ----- ------- -------- ------ Balance- December 31, 1993 56,666,000 5,666 297,163 (116,734) 186,095 Net Loss - - - (26,293) (26,293) ---------- ----- ------- -------- ------ Balance- December 31, 1994 56,666,000 5,666 297,163 (143,027) 159,802 Net Loss - - - (17,764) (17,764) ---------- ----- ------- -------- ------ Balance- December 31, 1995 56,666,000 5,666 297,163 (160,791) 142,038 Net Loss - - 7,500 (19,842) (12,342) ---------- ----- ------- -------- ------ Balance- December 31, 1996 56,666,000 5,666 304,663 (180,633) 129,696 Net Loss - - - (24,037) (24,037) ---------- ----- ------- -------- ------ Balance- December 31, 1997 56,666,000 5,666 304,663 (204,670) 105,659 Net Loss - - - (78,712) (78,712) ---------- ----- ------- -------- ------ Balance- December 31, 1998 56,666,000 5,666 304,663 (283,382) 26,947 Net Loss - - - (15,204) (15,204) ------- ------ ---------- -------- ------ Balance - December 31, 1999 56,666,000 5,666 304,663 (298,586) 11,743 ------- ------ ---------- -------- ------ Issuance of common Stock for cash: June 30, 1993 3,000,000 300 20,700 - 21,000 Net loss for six month period - - - (4,451) (4,451) ------- ------ ---------- -------- ------ Balance - March 31, 2000 59,666,000 $5,966 $325,363 $(303,037) $28,292 ========== ====== ======== ======== ======
See accompanying independent accountant's review report and notes to financial statements F-5 YAAK RIVER RESOURCES, INC. (A Development Stage Company) Notes to Financial Statements 1. Presentation of Interim Information In the opinion of the management of Yaak River Resources, Inc., the accompanying unaudited financial statements include all normal adjustments considered necessary to present fairly the financial position as of June 30, 2000, and the results of operations for the three months and six months ended June 30, 2000 and 1999, and cash flows for the six months ended June 30, 2000. Interim results are not necessarily indicative of results for a full year. The financial statements and notes are presented as permitted by Form 10-Q, and do not contain certain information included in the Company's audited financial statements and notes for the fiscal year ended December 31, 1999. F-6 EX-27 2 0002.txt
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AND STATEMENTS OF LOSS AND ACCUMULATED DEFICIT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10QSB FOR THE QUARTER ENDED JUNE 30, 2000. YEAR DEC-31-2000 JUN-30-2000 14574 0 0 0 0 50317 0 0 50317 22025 0 0 0 5966 22326 50317 0 0 0 0 4441 0 0 (4441) 0 0 0 0 0 (4441) (0.00) (0.00)
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